Category Archives: SaaS

Almost four years ago, I wrote a post that argues that SaaS will eventually win over on-premise software. At the time, Larry Ellison, Oracle CEO, still argued that SaaS was a fad.

Now, in 2015, it’s clear that SaaS has won the “delivery”. What’s more, SaaS has also created new markets, penetrating customer segments for which an on-premise software solution was cost prohibitive in the past. Dozens if not hundreds of successful SaaS vendors are hitting the market and seem to be covering every single business need in every vertical.

According to the Bureau of Labor Statistics in the US, only 44% of small businesses successfully make it through four years of operation. One reason is that because of their size, small businesses cannot master the skills that larger organizations have (such as marketing, sales, service and technology). So, it should not be a surprise that they have a hard time competing in the marketplace.

One of the areas that has been a weak spot for small businesses is the use of technology in general and software in particular.

From a software vendor standpoint, small businesses were traditionally overlooked as a target market. In fact, in the 1990’s, common wisdom was that successful software vendors should focus on large enterprises, where the money resides, and apply the direct sales model, with a $100K+ price tag. The wisdom at the time was that smaller price tags did not justify a direct sales force, and required indirect selling. Selling through resellers, however, was and still is hard to crack. It’s hard to get resellers to commit to sell a product before it gets traction. And even later, it’s hard to educate resellers to sell a product proficiently.

From a small business point of view, buying software is—simply put–not easy. How can a small business be expected to have the skills to evaluate new software? How can they be expected to master how to operate the software? How can they be expected to integrate it with other software? And, when it comes to on-premise software, how can they afford to deploy and manage the software?

After almost 14 years since founding Webcollage, it is now public information that Webcollage was acquired by Answers (http://www.answers.com).

More information about the acquisition and some of the thoughts around this opportunity are available in this press release.

Without delving into the specific thoughts and opportunities in this merger, I would like to point out the potential in powerful combinations of B2B (SaaS) businesses and B2C (consumer web) businesses. As one example, LinkedIn, which is generally known as a “consumer” (or “personal”) business, generates its revenue by selling its services to (other) businesses (for recruiting and similar purposes). It thus leverages its consumer scale to generate revenue from businesses, essentially operating as a SaaS company.

Similarly, the combined Answers/Webcollage company will have a strong B2C arm with broad reach and strong advertisement-driven revenue (Answers.com is a Top 20 site in the US), alongside with a solid B2B platform and team (coming from our own Webcollage), and with many potential areas of cross-leverage.

Whereas modern product cycles rely on shorter cycles, something along the lines of this diagram:

The assumption in modern approaches is that the road to good software is shorter when making smaller steps and frequent turns than when making large steps and more radical turns. (This is geometrically true in the diagrams…)

Old-style product cycles consisted of three main steps: planning (negotiation, prioritization, scheduling), development (design, coding, testing) and launch (alpha/beta, release, outbound marketing). The main question I was trying to tackle in the talk was how the corresponding activities map to product cycles with frequent releases.

On a side note, some organizations use old-style product cycles (infrequent software releases) while using “agile development” techniques internally (that is, frequent internal releases). While perhaps better than nothing at all, this approach misses—in my mind—much of the benefit in agile software development. In the end of the day, the biggest benefit is adapting to customer feedback, and without the software reaching real customers, value diminishes.

The areas I was trying to tackle in the talk were:

How does planning occur in an environment when there’s no defined period for planning (“beginning of the release”)? When the working assumption is that many of the details (and associated effort) will be revealed during the development process. And, how do roadmaps look in such an environment?

How do product launches occur in an environment when there’s no defined period for launch, but—instead—software is ready in chunks? How and when does customer feedback get incorporated into the cycle?

How does one integrate new approaches and opportunities brought about by agile development? Mostly, agile approaches facilitate experimentation through proof-of-concepts and such (with various variants such as MVP, MSP, and lean).

In case you’re in the Tel Aviv area on Jan. 30, 2013, you’re most welcome to drop by the Agile Practitioners 2013 conference. I plan to deliver a talk titled Product Roadmap, Planning and Launch in an Agile Environment.

The talk will revolve around the fact that in an Agile environment, predictability is knowingly sacrificed for flexibility. Agile practitioners assume that what’s being development changes along the way, and that the true effort associated with each new development is only revealed during the development process. They knowingly release new product functions in smaller chunks. And, they empower individuals and let them drive the process. This essentially makes traditional approaches for managing product roadmaps and launches obsolete.

I plan to cover some approaches and techniques in managing a product in an Agile environment, highlighting some examples from our experience at Webcollage, delivering a SaaS product to a large number of high-profile customers. The current plan is to touch various angles of the conflict, from planning (internal vs. external roadmaps, hard vs. soft commitments), conflict resolution (emergency and time-sensitive issues), release and rollout management (soft vs. official launches, gradual rollout, alpha/beta cycle and feedback management), as well as some additional areas as time allows (documentation).

On Friday, Workday (NASDAQ: WDAY) held the biggest tech IPO since Facebook.

Unlike Facebook, Workday does not run a consumer-facing business that claims to have a billion users. Instead, it’s a software-as-a-service solution provider for human resources management (and nowadays adjacent solutions). While not anything as sexy as Facebook, the company is now valued at over $8b.

Why is the market valuing Workday so highly? As usual, it’s a combination of several factors (some very likely exaggerated). But most importantly, is the belief that the new SaaS solutions will eventually replace many of the existing on-premise solutions. Or, as Aneel Bhusri, Workday co-founder said in an interview, “the incumbents are not prepared.”